Category Archives: Business

Sumo Dojo – Answering Startup Questions

Noah and I answer some questions people have about Startup bid-naz’s.  Some of the questions:

  • “I’m trying to start a company….what are the TOOLS I need?”
  • “I work 18 hours a day on my startup, and I still haven’t made money.  Am I doing something wrong?”
  • “When should I QUIT a project I’m working on?”
  • “Do I need a webpage, a Facebook page AND a Twitter for my business??”
  • “What do you think of Startup Weekends (where everyone gets together and builds a business in a weekend)?”
  • “Where can you find ideas for businesses?”
Let us know if YOU have questions on anything, and we’ll answer them :-)
-Nev

Actually Giving A Fuck

“Success leaves clues” is a fantastically short yet true statement about success.

….and after 28 years I’m starting to notice a trend about all the successful people I admire:

All of them….. Actually give a fuck.

I mean….they TRULY TRULY TRULY give a fuck about something.

I’m talking about people who have been successful for long periods of time.   Not just short bursts.

You know what….let’s just jump into a couple of examples and you’ll see what I mean:

Herb Kelleher of SouthWest Airlines (the only airline in history to stay profitable every year) - I’ve seen him speak 3 times (first |  second |  third), and I gotta say….they guy ACTUALLLLYYY cares about his employees and having as much fun as possible.  It’s allll he talks about the whole time, and you can tell he genuinely cares.  He also is a fun guy himself, and refuses to work at a company that’s not the same way.

Earl Nightingale – He’s the guy who kicked off the whole self-help market….and I’ve never heard of someone so dedicate to the quality of his work as this guy.  I’ve listened to pretty much every piece of content (that still exists) of his….and he never put out something “bad”.  His stuff is also so jam-packed with amazing advice that it leaves other stuff behind.  Sometimes I can’t believe they don’t just play his audio recordings on repeat at schools.

Howard Stern – The guy is literally MANIC on the insistance that his show be FUNNY.  To do that he’s been through massive “1st amendment” legal battles and fights with his own employers and the FCC…..all so he can “say what he wants”.  He’s consistently been the highest paid celebrity over the years because of it….all stemming from his absolute insistance that his silly little radio program “be funny”.

Steve Jobs – Watch every interview with him online (here’s one to start), and notice how god-damn-committed he is to “making the absolute BEST products on the market”.  Apple consistently does this despite people hating them (for not using Flash on iPhone & iPads, getting rid of floppy disk drives, getting rid of physical keyboards on phones etc).  I personally use a MacBook Air now….and I’ve gotta say that everything about it IS IN FACT “just waayyy better” than anything I’ve ever used before…..and it’s that extreme commitment Apple has to making incredible products that produces that feeling in me.

Gary Halbert – He’s the most revered direct response marketer I’ve ever heard of…and I love listening to anything he says….because he’s SO DAMN INSISTENT on getting his point across clearly.  He said something I’ve never forgot, “The number one mistake people make in trying to make money (online or anywhere else)…..is they expect to get a lot of money, without first giving a MASSSSSIIVE amount of value first.”

The Eight Secrets to Getting Rich

One of my favorite books EVER is How To Get Rich by Felix Dennis.

Towards the end of the book in chapter 19 he attempts to summarize the entire book into eight very-condensed bullet points.

I have written them out verbatim in order to remember them better:

How I made AppSumo a lot of money through emails

Two quick background stories then I’ll show how some clever writing made AppSumo an ass-ton of money:

———QUICK BACKGROUND STORY 1———

This guy, Noah Kagan is one of my close friends.  He was something like employee number 30 at Facebook and employee number 3 at Mint.com, then started a bunch of other companies.

His new thaang is AppSumo.com which is like “Daily Deals for Geeks”.  It’s like Groupon but for nerds like me.

Well recently Noah moved back to Austin, and he gets bored running his $(he-won’t-let-me-release-his-revenue-but-it’s-really-good) company from home, so he scooters on over to my place to work.

We sit around, work, geek out….and for some reason on Fridays we have a weekly tradition of drinking while we work.  It’s nerd heaven.

Whatever.

On to the next piece of this puzzle:

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———QUICK BACKGROUND STORY 2———

Roughly 9 or 12 months ago I started taking a deep interest in copy writing.

Copy writing is the “art” of writing…..copy (aka WORDS).

Basically copy writing is used to “sell stuff better”.

Naturally this interests me since I:

1.) Write a lot (hence this blog).

2.) Own an online rave company that persuades people to buy stuff.

It was weird because I was staying up sometimes till 6am reading about this stuff and taking notes.  It somehow just….gelled with me.  I started reading everything I could about copy writing…and essentially bought every book I could about it.

I took notes.

I re-read things.

I re-read my own notes.

All the concepts all the gurus talked about were the EXACT OPPOSITE of what I was doing in my own business…so this angered and intrigued me.

I quickly remembered a sort-of-relatable quote about why so many people fail at losing weight:

“Reading about sit-ups, is not DOING sit-ups”

So with this guilt trip in my head, I decided to implement some of this copy writing junk…even though it was 100% the opposite thing I’d been doing with HouseOfRave.com.

To my utter-shock-surprise the first time I implemented all the copy writing rules I learned….the email blast I sent out pretty much sold out my inventory in two hours.

You can see the exact email I sent out that did this (warning: it’s password protected, so follow the instructions to get the el passwordo).

Fan-freakin-tastic for me eh?

Now let’s move on……

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———LET’S TIE THOSE TWO STORIES TOGETHER———

So one day Noah’s geeking out at my place, and I get an email from AppSumo for some deal they were running.

It was a Grasshopper.com $100 credit or something like that…and I wanted it.

However I was blatantly disappointed by the email saying simply:

“$100 Credit for GrassHopper.com, the phone system for entrepreneurs!”

AppSumo was still selling a TON of the deals with this format…but after all my intensive copy writing studying, this type of short email seemed like an egregious injustice to AppSumo AND the email reader.

Naturally I yelled at Noah saying, “Dude….I bet a lot of people don’t realize the true value of Grasshopper….why don’t you EXPLAIN what it can DO FOR THE USER, then offer them the $100 off?”

Noah agreed.

I further started showing him the structure of good sales copy, and “How I could TOOOTTALLY do better.”

He put me up to it.

I actually WANTED to do some of the emails in exchange for collecting the performance data.  Where else could I test out several emails a week to 50,000 people?

Anywhozit….I started preparing the emails 2 days before each deal came out, and….

HERE’S WHAT HAPPENED:

The first deal was something of a crappy deal.  Now I don’t mean it was a BAD deal….but it was going to SELL CRAPPY because it was extremely niche based.  It was a deal for a service that sends you 4 sets of matched fonts per month.

Now NO ONE BUT HARDCORE DESIGN NERDS would buy this….in fact, they all know you can get thousands of fonts online for free.  This was a carefully curated collection of fonts, and only hardcore graphics designers would buy something like that….to make it an even harder sell, it was a lifetime membership costing something like $125.

With the old AppSumo email style, this deal had no chance of stellar sales.

But then Enter Copy-Writing-Minded-Neville:

I quickly realized a VERY specific deal would exclude tens of thousands of people in this case…so I tried applying copy writing techniques to neutralize that.  Basically, being open and honest about it.

It started out like this:

If the names “Lucida Sans Unicode” or “Courier New” don’t mean anything to you, go ahead and close this message.

You see my friend, today we’re reaching out only to the community of people known as font whores.

You know who you are!

If your knees go weak when I whisper, “GARAMOND.”
…you might be one of em.

Right off the bat this doesn’t necessarily sound like a typical marketing message.  In fact, it’s mildly offensive and quite sexually suggestive.

But you know what….PEOPLE READ IT.

People emailed us back saying the email had NOTHING to do with their line of work, but they still enjoyed reading the email.

We also got people saying they HATED the email and that it was misogynistic and (insert more whiny-bitch-complainer examples)…..you get the point.

SO THEN WHAT HAPPENED??

To Noah’s surprise, this particular deal TOOK OFF!  It was like one of those movies where the ugly girl puts on some makeup, let’s her hair down and wears a gown and is suddenly hot.

So what did this mean?

It means I just made AppSumo a bunch of MONAAAY!!:

Hooray right?  I just made SOMEONE ELSE a bunch of money!

So that was pretty damn cool.  We turned the ugly girl into the “belle of the ball” with the power of of the pen.

Naturally the Chief Sumo wanted me to do the next email, then the next, then the next etc….

Some funny things happened in the next few email send-outs:

  • Every email did EXCEEDINGLY well compared to past emails. Only difference: Good copy.
  • The emails did piss off a small subsection of people, and the unsubscribe rates went up 1% on certain emails.  1% is actually BELOW industry standards…so we’re all good.
  • We got people saying they LOVED reading the emails and how cool they were.
  • We got some people saying they LOATHED the emails (these for the most part were whiny-bitch-complainers who never bought anything anyway).
  • One of the emails (that I spent a lot of time on) got the HIGHEST CONVERSION RATE EVER for any AppSumo email…..or ANY email I’ve ever heard of in my life.  A normal “good-converting” email is usually at 1% conversion (meaning 1% of the people it goes to actually BUY something directly from that email).  This particular email had over 10% conversion. If you understand what I’m talking about, that’s INCREDIBLE.

So that’s how I made AppSumo a ton of moolah….and learned something in the process.

I should teach a class on this stuff…..

“I want to start a business but don’t know where to start”

God I’ve heard that question so many times before.

A good deal of people I know see my lifestyle:

  • No boss
  • No set working time
  • Take any day off
  • Don’t have to commute anywhere
  • Can work from any location

….and they think it’s great.  And I got admit…it ain’t bad!

Many of them realize that working 9-5 is not just 9-5, but also the night before, the morning of….so it consumes and dictates nearly your entire day, what you can do, when you go on vacation etc.

If you like your job…this isn’t really a problem, but if you don’t….yeesh.

So back to the question I get from someone who’s never started a business and now wants to after years of working:

“I want to start a business but don’t know where to start”

To burst most bubbles quickly: It’s doubtful it will happen. I’ve seen long-term working people start successful businesses only a few times. Usually the longer someone’s worked, the more likely they will not succeed.  Most people trying this are in the wrong frame of mind almost immediately. They just want to “make some money” without doing much work.

Anyhow, for this question I will try to assume the role of how I’D PERSONALLY go about starting a business with no particular business acumen.

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First and foremost I’d GET MY LEARN ON.  That’s right….prepare to READ A SHIT LOAD OF STUFF.  And TAKE NOTES.  It’s like school.

Then I would try to implement what I’ve learned and make $100 from it.

That’s it.

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I think those three short sentences above can teach you an immense deal about business.

The benefit of this is:
1.) It’s easy to make $100 in just about anything.
2.) Simply DOING something will very quickly show if you like it or not.
3.) Your desire to learn will be way more intense if you’re currently DOING something real….not just thinking about a hypothetical business you might build.

It is ABSOLUTELY GRATIFYING to destroy the dreams of people who say, “I want to start a business but can’t think of anything”.

Me: “What business books have you read?”

Them: “Ummmm, none.”

Me: “Have you ever written down what you like to do, what skills you have etc. on a piece of paper?  Spent a couple of hours on it?”

Them: “Hmmmmm…..not really.”

Me: “Have you sought out business people you admire and asked them to show you how their business works”

Them: “I once saw YouTube video of Bill Gates.”

Me: “So basically you’ve done NOTHING to realize your dream of starting a business?”

Sincerely,
Neville (destroyer of dreams)

P.S. Here’s some motivation to consume if you fall in that camp.
Earl Nightingale’s The Strangest Secret

The House of Rave Confessions

I own a business called House Of Rave.com.

It’s a drop shipping business, which means I don’t physically handle the products myself.

PRO’S:

  • If I stay on top of things, I only have to do a minimum of an hour or less of work per day (except maybe busy seasons).
  • The business makes money when I sleep.
  • I’ve slowly built a “moat” around the business which makes it (just a little) harder for newer competitors to compete with me.
  • I can say “I own a rave company
  • It’s helped me pay for college, supported me even after college.
  • By itself, it pays me enough money to live a pretty cool life, travel whenever I want and still save money.
  • This business allows me to abide by the rules I heard from Joe Sugarman, “Anything you can do to eliminate people or paper, do.”
  • It provides me a FANTASTIC “testing grounds” for trying out marketing techniques.  Like when I read something great in a book, I can easily implement it to HoR with ease since it’s 100% my business.
  • It’s always on top of cash flow, meaning I never have much debt (other than about $10,000 – $15,000 revolving debt on an American Express card).
  • Because of the above, I get crazy amounts of airline points (in fact I just checked I have half a million airline miles I’ve never used until TODAY when I booked a flight to Vancouver….fo FREE).

CON’S:

  • I must do at least SOME work everyday.
  • If I get hit by a bus, the business will cease to exist.
  • It’s unlikely it will ever get HUUUUGGEEE (without a change in the way things are currently run).

House Of Rave is what Tim Ferriss refers to as a “Muse”…a small business that you can run from anywhere which pays for your lifestyle.

However I’m no fool (well, at least not completely).

I am a middle man.  And as technology improves, manufacturers get more sophisticated, and consumers get more educated….I will be phased out with my current model.

I don’t foresee this happening anytime soon, and I do have time, but it will eventually happen.  Fortunately I’ve found ways to overcome that for now, but looking at a 5 or 10 year forecast, it will move in that direction.  If someone else took over, they could make the business BIG and sustainable in the long run, but it’s never really been a passion of mine.  It was one of many side-projects that made enough money not to pull the plug.

I’m really grateful I’ve had House Of Rave all these years.  I’ve started a lot of small businesses here and there, but HoR has been around the longest (first live order was placed in 2001).

But there’s a yearning to branch out even further.

I’m getting hungry.

Car2Go Austin’s newest member…ME

I currently now have FIVE different methods of getting around:

1.) Walking

2.) Riding my bike

3.) Riding my scooter

4.) Driving my car

…and now the newest addition to my fleet of transportation…

5.) Snagging a Car2Go!

But wait…I get to drive around this sexy beast, but I didn’t BUY it.

Car2Go’s are an experimental transportation system that are available in 3 places:

  • Ulm, Germany
  • Hamburg, Germany
  • -and-
  • Austin, TX. USA (yet another benefit of living here)!

Basically it’s 400 Smart Cars scattered randomly through the city.  If I see one, I can freely hop in, drive away, then leave it wherever I want!  EVERYTHING is included in the price….gas, insurance, parking etc.  All you need is a little member ship credit card thingy to access all the cars.

It’s like using a car only when you need it….but without having to return it to a rental place.  The cars are tiny, and you can park them pretty much anywhere, even nose-first style. I’m nearly as big as the whole car!

I can easily wrap my arms around the width of the Smart car:

This is how I parked one night…no parallel parking needed!

Big pimpin’ in one of the Car2Go’s laying around on the street before a quick spin:

Now it’s cool to just stumble around and find one of these, but if you need help, there’s a free Car2Go iPhone app that locates every available Car2Go around you.  It will even tell you fuel levels, how clean it is or if it has any damage.  There’s roughly 400 of them humming around the city:

The test drive was fun, and I know several friends who’ve essentially stopped using their cars because they use these so often.  What a useful concept!

Facebook made me hundreds of extra dollars for free

Something like one month ago I put up the now-famous “Facebook Like Button” on a business I run called HouseOfRave.com.

House Of Rave is an eEommerce company that sells light up and glow stuff.  Simple enough (see how it works).

The Facebook Like Button is a simple button people can press, and it will automatically “Like” a particular web address on their Facebook Feed.  It puts a small sentence saying, “Neville Medhora likes WhateverTheLinkIs” on your Facebook.

I did a little poking around and found the Like Button was really easy to install on the Shopsite shopping cart software I use.  To install it on your site, simply Google the term:

“How to install the Facebook Like Button on (insert your platform here)”

…and you’ll surely find a solution.  It took me about 3 minutes to install, and 2 minutes to test if everything was working correctly.  It turned out looking like this on every product of HoR:

Obviously the number of “Likes” varies from page to page.

Now this was just a simple test to see what would happen….and I was surprised to see that some of my product pages already had several “Likes” on Facebook.  Off to a good start!

Now a month later, some of the more prominent products on HoR have been gaining traction.  The Finger Lights above currently have 100+ Likes!…meaning somewhere on Facebook exist 100+ links to this product (most likely buried in the archives of people’s news feeds).

So the results of the inflow of traffic were as follows (there was already a small amount of traffic coming from Facebook, so the numbers aren’t that skewed:

WHAT I FOUND INTERESTING was that Facebook users clicking on their friends links to House Of Rave were pretty decent traffic.

The traffic had slightly higher bounce rates than the average visitor, fewer pages per visit and spent less time on the site than average, but….

It’s FREE traffic I didn’t do a DAMN thing to acquire!

Sweet :-)

The cool thing is, even if the conversion rate is much lower than the site average…SOME of the visits do convert, and in the first few weeks I noticed hundreds of extra dollars in revenue due to that completely free traffic.

That was revenue that didn’t exist before, but does now.

Those were customers who didn’t exist before, but do now.
This is a new channel of free traffic that didn’t exist before, but does now.
…all for 5 minutes of work!

As people start using Like buttons more and more, it could even become more profitable.

So Facebook Like Button…for making me free money while I do NOTHING….I LIKE you!

P.S.  An unexpected benefit I noticed is that products with lots of “Likes” are getting slightly better conversion rates now.  It seems people trust the Like button because the website owner cannot manipulate the numbers themselves.